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Reid v. Williams (10/2/98), 964 P 2d 453

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.


ELLIOTT REID,                 )
                              )    Supreme Court No. S-7839
             Appellant,       )
                              )    Superior Court No.
     v.                       )    3AN-94-5234 CI
DAVID WILLIAMS, M.D.,         )    O P I N I O N
             Appellee.        )    [No. 5034 - October 2, 1998]

          Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
                    Brian C. Shortell, Judge.

          Appearances: P. Dennis Maloney, Maloney &
          Haggart, Anchorage, for Appellant.  Roger F.
Holmes, Biss & Holmes, Anchorage, for Appellee. 

          Before: Compton, Eastaugh, Fabe, and Bryner,
Justices. [Matthews, Chief Justice, not participating.]

          EASTAUGH, Justice.

          Elliott Reid sued Dr. David Williams for medical
malpractice and prevailed at trial.  Applying AS 09.55.548(b), the
superior court subtracted Reid's medical expenses paid by Reid's
insurer from the jury's medical expenses award.  Concluding that it
was a reasonable legislative response to a perceived medical
malpractice insurance crisis, we reject Reid's argument that the
statute violates his substantive due process rights.  Concluding
that the classification between doctors and other tort defendants
bears a fair and substantial relation to attainment of a legitimate
government objective, we reject his argument that the statute
violates his equal protection rights.  We also conclude that it was
not an abuse of discretion to deny Reid's motion for enhanced
attorney's fees and actual costs.  We therefore affirm on all
          Complaining of a sense of fullness in his ear, Elliott
Reid was seen by Dr. David Williams in 1992.  Williams diagnosed a
perilymphatic fistula and performed surgery.  A small bone in
Reid's inner ear was dislocated during the surgery.  
          Reid brought a medical negligence action against
Williams.  A court-appointed Expert Advisory Panel (Panel) of three
local physicians evaluated Williams's care.  It concluded that
Williams's treatment was inappropriate because Reid's symptoms did
not support the diagnosis, and that the medical care injured Reid. 
          In December 1995 Reid served Williams with a $75,000
offer of settlement.  Reid filed an amended complaint the next day,
adding claims for unfair business practices, fraud, breach of the
duty of good faith and fair dealing, and punitive damages.  A
twelve-day trial commenced in May 1996.  At the close of Reid's
case, the superior court dismissed the claims added in the amended
complaint.  The case went to the jury on the negligence claim.
          The jury found that Williams was negligent in deciding to
perform the surgery, and that his negligence was a legal cause of
injury to Reid.  The jury awarded Reid damages of $25,000,
including $6,553 for past medical expenses.
          As the prevailing party, Reid moved for an award of
enhanced attorney's fees and actual costs.  The court denied Reid's
motion for enhanced attorney's fees and ordered that the fees be
calculated according to the Civil Rule 82(b) formula on a
"Contested With Trial"basis.  The fees awarded were $3,790.82 (20%
of $18,954.10).  The court denied Reid's motion to recover actual
costs and awarded costs "in accordance with the rules as determined
by the clerk."  Reid was eventually awarded $9,464.51 in costs. 
          Citing AS 09.55.548(b), Williams argued that Reid's jury
award for past medical expenses should be reduced by approximately
$6,000 because Reid's insurer had paid his medical bills.  The
superior court reduced the award for past medical expenses from
$6,553 to $507.10, the amount of medical expenses not paid for by
Reid's insurer. 
          Reid appeals these rulings.
     A.   The Constitutionality of AS 09.55.548(b)
          The superior court reduced the damage award for past
medical expenses by the amount Reid's insurer paid.  The court
applied AS 09.55.548(b), [Fn. 1] which abrogates the collateral
source bar found in AS 09.17.070.  Reid claims that AS 09.55.548(b)
violates his constitutional rights to substantive due process and
equal protection.  He asks us to set aside the trial court's order
offsetting his damages by the amount paid by his medical insurance.
[Fn. 2]
          1.   Waiver
          The parties dispute whether Reid waived any
constitutional challenge by only briefly stating the constitutional
argument to the court below.  We will not ordinarily consider
issues unless they were raised in the trial court.  Brooks v.
Brooks, 733 P.2d 1044, 1053 (Alaska 1987). 
          Reid only briefly identified his due process and equal
protection arguments.  He articulated his constitutional challenge
in a footnote in a trial court memorandum, and alluded to the
alleged constitutional violation in a later memorandum.  Reid cited
no cases or legal authority.  He provided no analysis of the issue
apart from asserting that the statute was unconstitutional because
it treats medical care providers differently from other defendants.
          Despite the brevity of Reid's superior court arguments,
we will consider the constitutional issues.  The arguments do not
depend on new or controverted facts, and are identical to the
theory that Reid presented below.  See O'Neill Investigations, Inc.
v. Illinois Employers Ins., 636 P.2d 1170, 1175 n.7 (Alaska 1981).
[Fn. 3]  Moreover, Williams will not be prejudiced if we consider
the statute.  Williams responded to the merits of Reid's
constitutional arguments during the proceedings below, and the
parties have fully briefed the issues on appeal. 
          2.   Substantive due process 
          Reid argues that reducing the damage award under AS
09.55.548(b) violated his substantive due process rights guaranteed
by article I, section 7 of the Alaska Constitution. [Fn. 4]
          The party asserting a substantive due process challenge
must demonstrate that the statute bears no reasonable relationship
to a legitimate governmental purpose.  See, e.g., Chiropractors for
Justice v. State, 895 P.2d 962, 968 (Alaska 1995); Keyes v. Humana
Hosp. Alaska, Inc., 750 P.2d 343, 351 (Alaska 1988). [Fn. 5]  To
determine whether reducing Reid's damages violated his substantive
due process rights, we first examine the stated purpose of AS
09.55.548(b) and assess whether the statute is reasonably related
to that stated purpose. 
          Alaska Statute 09.55.548(b) was enacted in 1976 as part
of a comprehensive medical malpractice reform package intended to
alleviate a perceived crisis in medical malpractice insurance
costs. [Fn. 6] Although there is little specific discussion of AS
09.55.548(b) in the legislative history, the House and Senate
committee files for the 1976 medical malpractice reform legislation
show that AS 09.55.548(b) was part of "a comprehensive system to
furnish hospitals and individual health care providers with medical
malpractice insurance."  Plumley v. Hale, 594 P.2d 497, 498-99 n.3
(Alaska 1979) (citing Chapter 102 SLA 1976). [Fn. 7] 
          In Keyes v. Humana Hospital Alaska, Inc., 750 P.2d 343,
351-52 (Alaska 1988), we upheld a different section of the medical
malpractice reform statute in the face of a substantive due process
challenge.  The plaintiff in Keyes challenged AS 09.55.536, which
required her to present her case to an expert advisory panel.  See
id.  We noted that "[i]t is virtually beyond dispute"that the
panel review procedures were enacted "to alleviate the effects of
the malpractice insurance crisis."  Id.  We concluded that AS
09.55.536 was a reasonable legislative response to the perceived
medical malpractice insurance crisis, and thus did not deny
substantive due process.  Id. at 352. 
          Alaska Statutes 09.55.548(b) and 09.55.536 were part of
the same medical malpractice reform package, Chapter 102 SLA 1976, 
and were enacted for the same purpose, to alleviate the medical
malpractice insurance crisis.  See AS 09.55.548(b); AS 09.55.536;
Plumley, 594 P.2d at 498-99 n.3.  As we held in Keyes, the desire
to alleviate the medical malpractice insurance crisis was a
legitimate governmental purpose behind the medical malpractice
reform statutes.
          We next consider whether AS 09.55.548(b) is reasonably
related to that purpose.  By abrogating the collateral source rule,
AS 09.55.548(b) reduces the medical malpractice damage awards for
which some health care providers and their insurers are liable.  It
is reasonable to conclude that reducing damage awards would help
reduce the cost of medical malpractice insurance.  We conclude that
alleviating a perceived medical malpractice insurance crisis was a
legitimate public purpose for enacting AS 09.55.548(b), and that
the statute was reasonably related to that goal.
          Reid cannot make out his substantive due process claim
because he has not disproved the factual justification for the
statute.  See Keyes, 750 P.2d at 352.  Reid concedes that
responding to a perceived medical malpractice insurance crisis was
a legitimate government purpose.  He fails to disprove the
relationship between the statute and medical malpractice insurance
rates, and instead attacks the statute on policy grounds.  He
argues that the statute benefits negligent doctors who injure
insured patients, and that this benefit for negligent doctors is
not reasonably related to the governmental purpose of controlling
medical malpractice insurance rates.  He further argues that the
statute shifts plaintiffs' medical expenses to plaintiffs, or their
employers, through increased insurance premiums. [Fn. 8]  Reid's
arguments fail to disprove the relationship between the statute and
the medical malpractice insurance rates.  Even if the statute
unwisely benefits negligent doctors or shifts the costs away from
defendants, the statute may still reduce medical malpractice
insurance rates.  See Kenai Peninsula Borough, 527 P.2d at 452
(stating that it is "not a court's role to decide whether a
particular statute or ordinance is a wise one"in substantive due
process analysis). 
          We conclude that Reid has not met the burden of
establishing that there is no "conceivable legitimate public
policy"for the enactment of the statute. [Fn. 9]  See Kenai
Peninsula Borough, 527 P.2d at 452.  His substantive due process
challenge therefore fails. [Fn. 10]
          3.   Equal protection
          Reid argues that AS 09.55.548(b) violates the equal
protection clause of the Alaska Constitution [Fn. 11] because it
unlawfully discriminates between negligent doctors and other tort
          A medical malpractice plaintiff's right to damages is an
economic interest, which traditionally receives only minimal
protection under our equal protection analysis.  See, e.g.,
Chiropractors for Justice, 895 P.2d at 969 (applying minimum level
of judicial scrutiny to equal protection claim regarding health
care provider's economic interest in receiving payment under
Workers' Compensation Act).  Reid has not demonstrated that the
statute discriminates against a class that receives heightened
protection under the Equal Protection Clause.  We therefore review
AS 09.55.548(b) under the lowest level of equal protection
scrutiny. [Fn. 12]  Because the interest affected is economic and
receives minimal judicial protection, the legislative
classification must bear only a "fair and substantial relation"to
attaining "legitimate"government objectives. [Fn. 13] 
          In Keyes we considered an equal protection challenge to
a different section of the medical malpractice reform package, AS
09.55.536, which required medical malpractice plaintiffs to present
their cases to expert advisory panels.  See Keyes, 750 P.2d at 357-
58. [Fn. 14]  We upheld the statute under low-level scrutiny,
concluding that it bore a fair and substantial relation to the
statute's legitimate purposes of alleviating the effects of the
malpractice insurance crisis, and reducing the cost and improving
the availability of health care.  See id. at 352, 357-58.  We noted
that the plaintiff was unable to show that the statute was unlikely
to reduce litigation over malpractice claims.  See id. at 358.
          The analysis we followed and the conclusion we reached in
Keyes apply here as well, as AS 09.55.536 and AS 09.55.548(b) were
enacted as part of the same reform package.  The interests involved
and the greater statutory purpose, i.e., to control medical
malpractice insurance costs and increase the availability of health
care, are identical.  We were persuaded by the legislative history
in Keyes, and we are persuaded by this same legislative history
today.  Reducing medical malpractice damage awards by the amount
received by a malpractice victim's insurer lessens the liability of
health care providers.  This in turn reduces the cost of insuring
the health care providers.  We therefore conclude that AS
09.55.548(b) bears a fair and substantial relation to the goal of
alleviating the medical malpractice insurance crisis.   Cf. Eastin
v. Broomfield, 570 P.2d 744, 753 (Ariz. 1977) (stating that "[b]y
scaling down the size of jury verdicts by the amount of collateral
benefits the plaintiff may have received, the legislature could
reasonably assume that a reduction in premiums would follow").
          Reid states that we rejected an argument that reducing
insurance costs was a legitimate purpose in Alaska Pacific
Assurance Co. v. Brown, 687 P.2d 264, 272 (Alaska 1984) ("We hold
that the asserted goal of lowering insurance premiums can have no
independent force in the state's attempt to meet its burden under
the equal protection clause.").  Brown is inapposite.  We there
evaluated a statute that adjusted workers' compensation benefits
paid to recipients who moved out of state.  Id.  The statute
burdened the constitutional right to travel, and was therefore
subjected to a "very high"level of scrutiny.  Id. at 273-74.  No
analogous fundamental right is burdened by AS 09.55.548(b).  Our
observation in Brown that "savings will always be achieved by
excluding a class of persons from benefits they would otherwise
receive"is less significant when the statute creating such
"savings"is subject to rational basis review rather than "very
high"scrutiny.  See Brown, 687 P.2d at 272.  
          Reid also argues that AS 09.55.548(b) fails the "nexus
test"under Turner Construction Co. v. Scales, 752 P.2d 467, 470-72
(Alaska 1988).  In Turner we invalidated a statute that provided a
six-year statute of repose on suits against design professionals. 
Applying the "fair and substantial relationship test,"we noted
that the statute was intended to encourage construction by
shielding design professionals from future liability, and concluded
that this governmental purpose was legitimate.  Id. at 471.  The
statute, however, shifted liability from design professionals to
owners and material suppliers.  We reasoned that any incentive to
build that the statute might give design professionals was offset
by the disincentive to build that the statute gave owners and
material suppliers.  We invalidated the statute because it
discouraged these third parties from building and therefore
interfered with the statute's stated purpose of encouraging
construction.  Id. at 472.
          Turner is distinguishable from the instant case.  Turner
turned upon the fact that the statute's effect on third parties
actually chilled construction, an effect that was at odds with the
stated purpose of the statute.  Here, there is no chilling effect
that interferes with the stated purpose of the statute, which is to
decrease the costs of medical malpractice liability insurance for
health care providers.  The central flaw in Turner was that the
statute intended to encourage construction had the opposite effect. 
Reid has not shown that this statute, which was intended to lower
malpractice insurance rates, actually has the opposite effect and
instead raises malpractice insurance rates.  Turner is therefore
          Reid seems to imply that AS 09.55.548(b) may have become
unconstitutional because the conditions which potentially justified
its enactment in 1976 no longer exist or have been ameliorated.
Reid has not shown that there is merit to that position.  We must
also assume that the statute helped alleviate the conditions
perceived by the legislature in 1976; to abrogate the statute would
potentially restore conditions that convinced the legislature to
adopt the statute in the first place.
          For these reasons, Reid's equal protection challenge
fails.  We note that courts elsewhere have discussed equal
protection attacks on statutes that abrogate the collateral source
rule for medical malpractice suits.  Courts that have reviewed the
statutes under a version of the rational basis test have found that
the statutory distinctions between malpractice plaintiffs and
defendants and other tort plaintiffs and defendants were reasonably
related to the legislative objectives of lowering the costs of
medical malpractice actions, and ensuring the continued
availability of health care for the public. [Fn. 15]  By contrast,
courts that have employed a more stringent standard of equal
protection review, such as "heightened scrutiny"or "means
scrutiny,"have invalidated statutes that abrogate the collateral
source rule for medical malpractice defendants. [Fn. 16]  
          Reid's other equal protection arguments were raised for
the first time on appeal, and are therefore waived.  See Arnett v.
Baskous, 856 P.2d 790, 791 n.1 (Alaska 1993).
     B.   Reid's Claim for an Enhanced Attorney's Fees Award
          Reid, the prevailing party, was entitled to an award of
attorney's fees under Rule 82.  A schedule fixes attorney's fees at
twenty percent of the first $25,000 of a money judgment in a case
that is "Contested With Trial."  Alaska R. Civ. P. 82(b)(1). 
Following an amendment that became effective in 1993, a trial court
may deviate from a scheduled award if, upon considering itemized
factors, it "determines a variation is warranted."  Alaska R. Civ.
P. 82(b)(3).  A trial court departing from the schedule must
"explain the reasons for the variation."  Id.  The superior court
awarded Reid attorney's fees under Rule 82(b)(1), and did not issue
written findings.
          Reid first contends that the lack of findings renders the
superior court's award unreviewable.  We disagree.  The superior
court was not required to issue findings of fact or otherwise
explain its award because it awarded the attorney's fees prescribed
by Rule 82(b)(1).  There is a presumption that a prevailing
plaintiff recovering a money judgment will receive fees in
accordance with the schedule.  See Babinec v. Yabuki, 799 P.2d
1325, 1337 (Alaska 1990) ("Attorney's fees awards made pursuant to
the schedule of Rule 82 are presumptively correct.").  Entry of the
Rule 82(b)(1) award without fact findings was not error, and does
not prevent us from reviewing the decision.  
          Reid also argues that the superior court's refusal to
award enhanced attorney's fees was an abuse of discretion.  We
address Reid's contentions in turn. [Fn. 17]
          1.   The parties' asymmetrical risks
          Reid argues that Rule 82 unfairly subjects plaintiffs and
defendants to asymmetrical risks: he claims that if Williams had
prevailed, Williams's Rule 82(b)(2) fees award would have been
fifteen-to-twenty-five times greater than Reid's.  Reid claims that
this disparity between the prospective awards renders the trial
court's $3,790.82 award "manifestly unreasonable"; he requests
award of an "amount that approximates the lower end of the amount
that Dr. Williams would have been entitled to under Alaska R. Civ.
P. 82(b)(2) had he won."
          The asymmetry noted by Reid is an inherent result of
using two different methods (percentage of damage award for
prevailing parties who recover a money judgment and percentage of
incurred attorney's fees for prevailing parties who do not) to
calculate the presumptive Rule 82 attorney's fees awards.  This
asymmetry has its converse: assume a claimant recovers damages of
$500,000 at trial.  Ignoring prejudgment interest, Rule 82(b)(1)
presumes an attorney's fee award of $52,500.  Whether the trial
lasts two days or twenty, the rule presumes the same award.  If the
defendant were to prevail in that case after a two-day trial
(assuming hypothetically twenty-eight additional days of pretrial
preparation) the presumptive Rule 82(b)(2) award would be about
$10,800 (30% x 30 days x 8 hours/day x $150/hour).  This would be
substantially less than the prevailing claimant's fee award.  The
disparity is the product of using, by necessity, two different
methods to measure the presumptive awards.
          This necessity arises out of the conjunction of the
purpose of Rule 82 -- to partially reimburse prevailing parties for
the fees they must pay their attorneys -- and the difference in how
these classes of litigants usually compensate their attorneys. 
Usually parties seeking money recoveries in tort cases pay their
attorneys under contingent fee agreements requiring them to pay
their counsel twenty-five to forty percent of the total recovery. 
And usually civil litigants not seeking money judgments pay their
lawyers on an hourly basis.  The presumptive Rule 82(b)(1) and
(b)(2) fee awards bear some relationship to the fees these
prevailing parties actually pay their attorneys.  Using the example
of the $500,000 recovery, the presumptive award of $52,500 is
probably about twenty-five to thirty percent of the lawyer's
contingent fee.  This corresponds to the presumptive Rule 82(b)(2)
percentage (thirty percent of actual fees if a case goes to trial).
          Thus, any asymmetry between attorney's fees awards to
these classes of parties is the natural consequence of using two
different methods to calculate these classes of parties' Rule 82
awards.  This asymmetry is usually both acceptable and benign.  The
asymmetry inherent for "normal"cases does not in and of itself
justify a departure from Rule 82(b)(1).  But circumstances in a
given case may bring the factors listed in Rule 82(b)(3) into play. 
Although Rule 82(b)(3) does not specify asymmetry as a basis for
relief, it lists ten factors -- among them, "the complexity of
litigation,""the length of trial,""vexatious or bad faith
conduct,"and "the relationship between the amount of work
performed and the significance of the matters at stake"-- that
adequately address the pertinent considerations.  We discuss some
of these factors below.
          2.   Williams's alleged intransigence and intent to
deter future litigants 

          A trial court may depart from the Rule 82(b)(1) schedule
if a party is guilty of "vexatious or bad faith conduct."  Alaska
R. Civ. P. 82(b)(3)(G).  Reid alleges that Williams "escalated"
litigation costs by refusing to settle, and that Williams's
insurance carrier pursued a "scorched earth litigation policy"to
deter future litigants.  Williams contends that Reid's high
expenses are due to Reid's litigation strategy, which complicated
a "garden variety medical malpractice case."
          Reid has not shown that the superior court abused its
discretion by denying Reid's motion for enhanced attorney's fees on
this ground.  The superior court was in the best position to
determine whether a party's behavior was excessively litigious or
in bad faith. [Fn. 18]  The superior court also had discretion to
consider Reid's unsuccessful claims when it awarded attorney's
fees.  See Alaska State Bank v. General Ins. Co., 579 P.2d 1362,
1369 (Alaska 1978) (stating that it was not manifestly unreasonable
for the court to take into account that it ruled against the
prevailing party on one of the contested issues when determining
attorney's fees and costs).
          The superior court did not abuse its discretion by
refusing to award enhanced attorney's fees based on Williams's
refusal to settle.  See Van Dort v. Culliton, 797 P.2d 642, 645
(Alaska 1990) (stating that trial court may not consider settlement
negotiations as reasons to reduce or increase an attorney's fee
award).  Rule 68 did not apply, and the final judgment in the case
was much less than the settlement offers.  Rule 68 applies when
"the judgment finally rendered by the court is not more favorable
to the offeree than the offer."  Alaska R. Civ. P. 68(b).
          3.   The complexity of this medical malpractice action

          A lawsuit's complexity may justify departure from the
Rule 82(b)(1) schedule.  Alaska R. Civ. P. 82(b)(3)(A).  Reid
argues that medical malpractice cases are more complex than
ordinary negligence cases, and that this was an unusually complex
malpractice case.  The complexity of this case, however, did not
mandate enhanced attorney's fees.  See Moses v. McGarvey, 614 P.2d
1363, 1370 (Alaska 1980) (stating that complexity is only one
factor, which alone does not justify full attorney's fees).  The
superior court did not abuse its discretion by failing to award
enhanced attorney's fees based on this factor.
          4.   The alleged chilling effect of the nominal award

          Reid argues that the nominal award of attorney's fees
will deter access to the courts and discourage non-wealthy
individuals from litigating good faith claims.  He contends that
individuals cannot seek judicial redress if the cost of litigating
outweighs the damages awarded.  Williams argues that Reid simply
miscalculated the value of the case and that Williams should not
shoulder the expense of Reid's miscalculation. 
          We have expressed concern that "financially ruinous"fee
awards against good faith civil litigants could deter access to the
courts.  See, e.g., Malvo v. J.C. Penney Co., 512 P.2d 575, 586-88
(Alaska 1973); see also Van Huff v. Sohio Alaska Petroleum Co., 835
P.2d 1181, 1189 (Alaska 1992) (Matthews, J., dissenting); Bozarth
v. Atlantic Richfield Oil Co., 833 P.2d 2, 5-7 (Alaska 1992)
(Matthews, J., dissenting).
          In those cases, we were concerned that fee awards levied
against losing litigants could deter access to the courts.  This
case is different because it involves a claim that inadequate fee
awards to winning litigants will deter access to the courts.  Reid
in essence argues that he should not have to bear his own
litigation expenses, which he claims are so high that Williams
should be required to reimburse him.  In comparison, the
unsuccessful plaintiffs in Malvo and Bozarth claimed that they
should not have to bear the defendants' litigation expenses, which
they were claimed were financially ruinous. 
          Although it may seem that both situations equally chill
judicial resolution of disputes, we see a fundamental difference. 
In Malvo and Bozarth, the question was whether it was an abuse of
discretion to shift very substantial litigation expenses to the
losing plaintiffs.  Here the question is whether it was an abuse of
discretion to decline to shift additional expenses from the party
that incurred them.  Even though a party's litigation expenses are
in part the result of the opponent's litigation tactics, to a large
extent the party has the ultimate control over the way it assesses
its case and litigates its position.  
          Rule 82 already provides protection for the winning
litigant who is forced to respond to an opponent's excessive
efforts or bad faith litigation tactics.  See, e.g., Alaska R. Civ.
P. 82(b)(3)(F) ("the reasonableness of the claims and defenses
pursued by each side") & (G) ("vexatious or bad faith conduct"). 
But the record does not compel a conclusion that it was error not
to apply this factor here.
          Civil Rule 82 also distinguishes between parties in the
position of Reid -- who was awarded allegedly inadequate attorney's
fees -- and non-prevailing parties -- who must pay attorney's fees
to their opponents.  A trial court may consider "the extent to
which a given fee award may be so onerous to the non-prevailing
party that it would deter similarly situated litigants from the
voluntary use of the courts."  Alaska R. Civ. P. 82(b)(3)(I)
(emphasis added).  Because Reid is the prevailing party, this
factor does not justify departing from the Rule 82(b)(1) schedule.
          Some of the factors noted by Reid would have justified an
enhanced fee award if the superior court had found that they were
relevant to this case.  It was not obliged to do so, and we
conclude that the superior court did not abuse its discretion by
declining to deviate from the Rule 82(b)(1) schedule.
     C.   Costs
          Finally, Reid argues that the superior court should have
awarded him actual costs because he alleges that: (1) Williams
escalated the costs by hiring three expert witnesses; (2) it is
hard to find an in-state expert, as Alaska physicians will not
testify against each other; and (3) the case was complex. [Fn. 19]
          Civil Rules 79 and 83 and Administrative Rule 7(c) govern
costs absent justification for deviation.  No rule or case calls
for deviation here, [Fn. 20] and Civil Rule 94 does not require
relaxation of the rules. [Fn. 21]  We conclude that the superior
court did not abuse its discretion by refusing to award Reid's
actual costs.  See also Hickel v. Southeast Conference, 868 P.2d
919, 931-32 (Alaska 1994) (finding no abuse of discretion when
trial court refused to award full expert witness fees);
Municipality of Anchorage v. Frank Coluccio Constr. Co., 826 P.2d
316, 331 (Alaska 1992) (stating that prevailing party is limited to
expert witness fees specified in Rule 7(c), absent bad faith or
reprehensible conduct).
          For the reasons discussed above, we AFFIRM. 


Footnote 1:

     AS 09.55.548(b) states that,
          Except when the collateral source is a federal
program that by law must seek subrogation and except death benefits
paid under life insurance, a claimant may only recover damages from
the defendant that exceed amounts received by the claimant as
compensation for the injuries from collateral sources, whether
private, group, or governmental, and whether contributory or
noncontributory.  Evidence of collateral sources, other than a
federal program that must by law seek subrogation and the death
benefit paid under life insurance, is admissible after the fact
finder has rendered an award.  The court may take into account the
value of claimant's rights to coverage exhausted or depleted by
payment of these collateral benefits by adding back a reasonable
estimate of their probable value, or by earmarking and holding for
possible periodic payment under (a) of this section that amount of
the award that would otherwise have been deducted, to see if the
impairment of claimant's rights actually takes place in the future.

Footnote 2:

     Issues of constitutional interpretation are questions of law
which we review de novo.  Revelle v. Marston, 898 P.2d 917, 925
n.13 (Alaska 1995).

Footnote 3:

     See also Sea Lion Corp. v. Air Logistics of Alaska, Inc., 787
P.2d 109, 115 (Alaska 1990); Zeman v. Lufthansa German Airlines,
699 P.2d 1274, 1280 (Alaska 1985).  

Footnote 4:

     "No person shall be deprived of life, liberty, or property,
without due process of law."  Alaska Const. art. I, sec. 7. 

Footnote 5:

     We have described the analysis for determining a substantive
due process claim as follows: 

               Substantive due process is denied when a
legislative enactment has no reasonable relationship to a
legitimate governmental purpose.  It is not a court's role to
decide whether a particular statute or ordinance is a wise one; the
choice between competing notions of public policy is to be made by
elected representatives of the people.  The constitutional
guarantee of substantive due process assures only that a
legislative body's decision is not arbitrary but instead based on
some rational policy.

               A court's inquiry into arbitrariness
begins with the presumption that the action of the legislature is
proper.  The party claiming a denial of substantive due process has
the burden of demonstrating that no rational basis for the
challenged legislation exists.  This burden is a heavy one, for if
any conceivable legitimate public policy for enactment is apparent
on its face or is offered by those defending the enactment, the
opponents of the measure must disprove the factual basis for such
a justification.

Concerned Citizens v. Kenai Peninsula Borough, 527 P.2d 447, 452
(Alaska 1974) (citations omitted).  

Footnote 6:

     One text describes the medical malpractice insurance crisis as

               In response to the recent vast increase
in the number of medical malpractice actions brought against
physicians, hospitals, and related personnel, the necessary costs
of  defense, and high damage awards, many malpractice liability
insurers have either greatly raised their premiums or declined to
offer coverage.  As a result, some physicians and other health care
providers have threatened to limit or curtail their practices and
services, creating what has been referred to as a medical
malpractice insurance "crisis."  

               In order to meet this challenge and to
continue to provide proper health care for their citizens, a number
of states have enacted remedial legislation.  In general, the
expressed purposes of these statutes are to make professional
health care insurance available at a reasonable cost, and to
establish a system through which a victim who has sustained injury
or death caused by a health care provider can be assured of a
prompt adjudication of the claim and a fair and reasonable

David W. Louisell & Harold Williams, 2 Medical Malpractice  18.02,
at 18-10 to 18-11 (1992 & Supp. 1993).  

Footnote 7:

     Legislation abrogating the common law collateral source rule
was enacted throughout the United States in order to alleviate the
insurance crisis.  See id.  18.02, 18.05 & Appendix B (discussing
and cataloging twenty-three state statutes that abrogate collateral
source rule for malpractice suits); see also Michael D. McCafferty
& Steven M. Meyer, Medical Malpractice: Bases of Liability sec.
at 139 (1985 & Supp. 1996) (discussing different state approaches
to reducing damages by payments from collateral sources); James J.
Watson, Annotation, Validity and Construction of State Statute
Abrogating Collateral Source Rule as to Medical Malpractice
Actions, 74 A.L.R.4th 32, 37 (1989).

Footnote 8:

     A version of this argument has been successful in equal
protection challenges to statutes that abrogate the collateral
source rule for medical malpractice cases.  Courts have invalidated
the statutes under heightened scrutiny analysis, in part because
plaintiffs were burdened by the restrictions on their rights to
recover damages, and this burden unreasonably conferred upon
malpractice defendants the benefit of a limitation on liability for
damages.  See cases cited infra note 16. 

Footnote 9:

     Courts in other jurisdictions have considered substantive due
process attacks on statutes that similarly abrogate the collateral
source rule for medical malpractice suits.  See Watson, supra note
7, at 48-50.  Several courts have found the statutes to be a
reasonable legislative response to a perceived crisis in medical
malpractice insurance rates.  See id.; see also Ferguson v. Garmon,
643 F. Supp. 335, 342 (D. Kan. 1986); Eastin v. Broomfield, 570
P.2d 744, 753 (Ariz. 1977); Fein v. Permanente Med. Group, 695 P.2d
665, 684-86 (Cal. 1985); Bernier v. Burris, 497 N.E.2d 763, 775
(Ill. 1986).  But see Arneson v. Olson, 270 N.W.2d 125, 137, 133
(N.D. 1978) (invalidating the provision as "arbitrary and
unreasonable and discriminatory,"and lacking in "close
correspondence between statutory classification and legislative

Footnote 10:

     Williams did not argue on appeal that Reid had no property
interest in a damage award against Williams entitled to due process
protection.  We would have felt compelled to reach that issue, or
require supplemental briefing, before reaching any conclusion that
the statute was invalid with respect to Reid because it violated
his due process rights.  Cf. Eastin, 570 P.2d at 753 (observing
that abrogation of the collateral source rule did not deprive the
medical malpractice claimant of any property interest accorded
protection by the due process clause of the United States
Constitution); Fein, 695 P.2d at 686 (stating that a plaintiff had
no vested interest in a particular measure of damages and thus the
fact that the provision might reduce a plaintiff's award did not
render the provision unconstitutional so long as the measure was
rationally related to a legitimate government interest).

Footnote 11:

     Article I, section 1 of the Alaska Constitution provides in
relevant part that "all persons are equal and entitled to equal
rights, opportunities, and protection under the law."

Footnote 12:

     See McConkey v. Hart, 930 P.2d 402, 407-08 (Alaska 1996)
(reviewing under rational basis review a statute that allegedly
discriminated between tort victims). 

Footnote 13:

     See Chiropractors for Justice v. State, 895 P.2d 962, 972
(Alaska 1995); Pan-Alaska Constr., Inc. v. State, 892 P.2d 159, 162
(Alaska 1995); see also Gonzales v. Safeway Stores, Inc., 882 P.2d
389, 396 (Alaska 1994) (reviewing statute that created
classifications between different tort defendants under "fair and
substantial relationship"test).

Footnote 14:

     As discussed above, AS 09.55.548(b) was part of a
comprehensive measure adopted to control the rising costs of
medical malpractice insurance and to furnish hospitals and
individual health care providers with medical malpractice
insurance.  See Plumley v. Hale, 594 P.2d 497, 498 n.3 (Alaska
1979).  We consider the challenged provision in light of the
purposes of the entire act.  See Chiropractors for Justice, 895
P.2d at 969. 

Footnote 15:

     See, e.g., Ferguson v. Garmon, 643 F. Supp. 335, 342 (D. Kan.
1986); Baker v. Vanderbilt Univ., 616 F. Supp. 330, 332 (M.D. Tenn.
1985); Eastin, 570 P.2d at 753; Fein, 695 P.2d at 684-86; Pinillos
v. Cedars of Lebanon Hosp. Corp., 403 So. 2d 365, 367-68 (Fla.
1981); Bernier, 497 N.E.2d at 768, 775; Rudolph v. Iowa Methodist
Med. Ctr., 293 N.W.2d 550, 559 (Iowa 1980); see also Lambert v.
Sisters of Mercy Health Corp., 369 N.W.2d 417, 423-24 (Iowa 1985)
(upholding statute under rational basis review even when hospital
is self-insured and does not pay malpractice insurance premiums).

Footnote 16:

     See, e.g., Farley v. Engelken, 740 P.2d 1058, 1063-66, 1068
(Kan. 1987); Carson v. Maurer, 424 A.2d 825, 831, 835-36 (N.H.
1980); Arneson v. Olson, 270 N.W.2d 125, 133, 137 (N.D. 1978).

Footnote 17:

     "An award of attorney's fees will only be reversed for an
abuse of discretion, which exists if the award is arbitrary,
capricious, manifestly unreasonable, or the result of an improper
motive."  Hughes v. Foster Wheeler Co., 932 P.2d 784, 793 (Alaska

Footnote 18:

     See Hanson v. Kake Tribal Corp., 939 P.2d 1320, 1331 (Alaska
1997) (affirming award of enhanced attorney's fees based on the
trial court's finding that the defendant deliberately conducted a
excessively litigious defense); Stone v. International Marine
Carriers, Inc., 918 P.2d 551, 558 (Alaska 1996) (finding no abuse
of discretion when trial court denied prevailing defendant's motion
for full attorney's fees when plaintiff "vigorously litigated an
unresolved question"); Wickwire v. McFadden, 633 P.2d 278, 281 n.6
(Alaska 1981) (stating that trial court is in best position to
determine whether party acted in bad faith for purposes of
attorney's fees awards).

Footnote 19:

     We will overturn an award of costs only if the superior court
clearly abused its discretion.  Municipality of Anchorage v. Frank
Coluccio Constr. Co., 826 P.2d 316, 332 (Alaska 1992).

Footnote 20:

     See id. at 331 (stating that complexity of case is irrelevant
for purposes of calculating costs).  

          The trial court may award costs in excess of the
Administrative Rule 7(c) guidelines if a prevailing plaintiff
demonstrates that the defendant has shown "bad faith or
reprehensible conduct."  Id. (citing Fairbanks N. Star Borough v.
Tundra Tours, Inc., 719 P.2d 1020, 1036-37 (Alaska 1986)
(overturning award of expert fees in excess of guidelines and
stressing that the case did not involve "those extraordinary
circumstances where the losing party should be punished")).

Footnote 21:

     Alaska Rule of Civil Procedure 94 provides: "These rules are
designed to facilitate business and advance justice.  They may be
relaxed or dispensed with by the court in any case where it shall
be manifest to the court that a strict adherence to them will work